Where is the American and global economy headed? Last year, there were two sides to the debate. One camp argued that the recession in the United States would be V-shaped - short and shallow. It would last only eight months, like the two previous recessions of 1990-1991 and 2001, and the world would decouple from the US contraction.

Others, including me, argued that, given the excesses of private-sector leverage (in households, financial institutions, and corporate firms), this would be a U-shaped recession - long and deep. It would last about 24 months, and the world would not decouple from the US contraction.

Today, 20 months into the US recession - a recession that became global in the summer of 2008 with a massive re-coupling - the V-shaped decoupling view is out the window. This is the worst US and global recession in 60 years. If the US recession were - as most likely - to be over at the end of the year, as is likely, it will have been three times as long and about fives times as deep - in term of the cumulative decline in output - as the previous two.

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